Whether you’re developing new Multi-Family projects or retrofitting older ones, chances are you have considered a modern Internet and telecommunications system for your project. Let’s face it, everyone and everything uses the Internet these days; which has led to a growing trend among apartment owners who see the competitive advantage of driving a cutting-edge, technologically-driven brand. Take this marketing campaign as an example of a brand refresh possibility (copyrighted).

“Choosing the right apartment for your money is not easy, you want a modern, affordable place to live without sacrificing on the amenities. Why not choose an apartment that offers smarter amenities? Ones you will really use, like XYZ Apartments Fiber-Backed inclusive Internet & WiFi amenity. Enjoy the Internet from your living room to the pool at fiber speeds!”

·         Tag Line: Smarter Spending, Smarter living©

Construction of a new or retrofitted Fiber-Backed telecommunications system has many moving parts and can take considerable research, strategy, and investment.  When it comes to big technology decisions, most would agree to mitigate the risks; many accomplish this by not adopting technology too early (early adopters). Conversely, choose to get involved after the technology has a proven track record (“early majority”); thus, maximizing reward while mitigating risk. However, waiting too long (“laggards”) also has its own set of risks; you will eventually be deemed irrelevant in your marketplace. Further, and perhaps worse, you may miss out on a trifecta of profits earned from monthly recurring revenue, property value increase, and higher occupancy.

So, when is the right time to get involved? Not too early and not too late, right? Consider, that time is now. Technology, demand, and market trends are perfectly positioned for Profit Generating Internet Systems. A perfect blend of seasoned technology, like enterprise WiFi access points, and cutting-edge fiber distribution hubs has given rise to fast, affordable, highly reliable networks. The insatiable Demand for Internet is clear, your residents NEED good internet.

Installing or updating your Multi-Family project with the latest and greatest may sound daunting. With a tight capex, shrinking operating accounts and shrewd investors/partners to align, the decision can be understandably tough. However, with a good Return on Investment (ROI) and enough compelling reasons, your leadership will surely welcome the new project and the inevitable income stream.

We hope to guide and lead you through the decision-making process as you collect “enough compelling reasons” to implement a profit-generating, Fiber-Backed Internet System that will drive your brand as a technology leader in your marketplace.

1)      New Rental Income: Perhaps the most compelling reason is the new rental income. With a few simple tweaks to your construction philosophy and a small shift in company rental strategy your ownership group can realize an 8% increase in rental income from the “WiFi as a service” (WaaS) amenity, you now control. Further, consider the low-risk, high-reward opportunity for Fiber-Backed Internet services because the amenity is also a staple. So much so, the FCC in a 2016 ruling deemed the Internet a utility and it will be regulated as such.

2)      Property Value Multiplier: Whether the cost is part of the Capex (new build, remodel projects, etc.) or an out of operating expenses, consider that the increase in property value more than pays for the system. In fact, for most apartment buildings that are over 100 units, property value increase is around 3 to 5 times the investment. i.e. spend 100k and property value increases by nearly half a million dollars. 

An investment with a short return is indeed attractive. However, it is common practice for many owners who are trying to sell, to avoid new encumbrances and operating expenses. While that strategy may be sound for most purchases leading up to a sale, a purchase that can raise the per door profits, thereby raising the property resale value should be considered more like a retrofit. Implementation of an Internet system and the profits thereto can take as little as 6 months so even with a short runway, property owners can still squeeze a higher resale value.

To illustrate this point, think of the many investors who make a living by increasing a business’s Net Operating Income (NOI) and then selling the business for a profit. Revenue Generating Internet can certainly be used for that type of flip strategy. Read more on multipliers and Cash on Cash returns.

3)      Operational Savings and New Revenue Streams: Technology can save on expenses and generate profits; this can be realized as your company adds new systems and services to your Internet infrastructure. The Internet of things (IoT) opens up a whole world of gadgets, cost savers and profitable services (e.g. IPTV, VOIP, video surveillance, utility grid sensors, smart locks, smart home hubs, etc.).

4)      Higher Occupancy: Perhaps the hardest concept to quantify but certainly not less important, is occupancy rate. Owners will agree that “heads in beds” is the ultimate goal. If one new resident is likely to rent each month because you have Fiber-Fast Speeds, or they realize your network offers the lowest latencies in town (important to gamers); then you will have more than justified the install cost. It’s pretty easy to imagine higher occupancy with the proper marketing campaign.

Gamers Move-in Special. "Low latency, fiber-fast connections and one free public IP address when you rent by May 1st. Never get booted from your game again at XYZ apartments!"

a.      Tag Line: “We got your back, game on!” ©

Or simply appeal to the general public.

"More time and more money are something we all strive for. XYZ Apartments is committed to this and more for you, and that’s why we are offering newly remodeled apartments with inclusive Internet technology. Conveniently bundled with your rent for one easy low payment; for the things you use most, your home and your Internet gadgets!"

b.       Tag Line: “Value & Technology, I’m home” © 

In addition, new construction, renovating pre-existing structures or simply retrofitting have their own set of “compelling reasons”, let’s unveil a few.

New Build

1)      Ease of Construction: For new development projects you have some clear advantages. For one, construction is easier and thus cheaper when you plan your design ahead of time. For that reason, a new construction project is commonly thought of as the time to install low-voltage and fiber networks. Further, with the proper planning, technology, and know-how a very affordable system can be installed.

2)       Don’t Waste Money on Old Wiring Systems: Often missed by developers is that modern communications wiring can actually be cheaper to install and more profitable than the old wiring techniques. Many owners and developers are starting to understand just how much money and resources are wasted when installing antiquated phone (cat3) and cable (Coaxial) wires. Because of this, there is a growing demand for Private Network Operators (PNO’s) to design and install a more efficient and modern Fiber-Backed Internet infrastructure (hybrid fiber network). To do this they first had to shift their philosophy from the “Retail Model” (i.e. owned by Big Box Cable or whoever) to the “Ownership Model” (owned by owner); taking control of the system and their brand while capitalizing on new recurring profits. With this small shift in philosophy, developers are spending less on construction and are rewarded with an Internet system to boot. Now, they own and control the system rather than spending money on a third party-controlled system. This small shift in philosophy is actually a radical change from the status quo and that is why it will set your "technology-driven brand" apart from your contemporaries while generating revenue.

3)      Turn the system into a Revenue: Designing an efficient Internet delivery system and ditching the antiquated wires and are just the first two steps. After construction is complete, the third step is to shift your business philosophy to align with your new construction philosophy by turning your Internet infrastructure into a Revenue Generating Internet System.

Renovation

1)      Use Existing Causeways:  Most think that a renovation can be vastly more expensive than a new-build when it comes to the construction side of things. This is not always the case. Renovations have their advantages too. For example, pre-existing patios in a Garden-Style Apartment  can serve as a causeway (chase) for wiring to the attics and then to the units. Another example is the fact that new construction often requires many phases, which can drive up costs and time of completion. This dragged out approach can narrow the construction cost gap because of the increased operating expenses (e.g. travel, set-up, delays, rainouts, etc.) seen in a new-build. 

2)      New Technologies & Techniques: What has also narrowed the gap between new-build and renovations construction projects are new technologies and techniques. Micro-trenching is a new technique that allows installers to significantly drop the cost of trenching (i.e. reduced depth and width) and it is much less intrusive on the existing landscape. Another proprietary technique that is being used by installers is called Micro-drilling, allowing conduit with fiber to be placed under driveways, sidewalks, and streets in a fraction of the time.

Additionally, fiber distribution techniques like the “Point-to-Point Daisy Chain” have also made renovations more affordable by reducing the labor and materials needed.  Traditionally a daisy chain is considered a weak network design because one point of failure can cause a cascade of outages. However, with Point-to-Point daisy chains, the fiber is bundled but each strand is still dedicated. So, a majority of the connection is, in fact, free from cascading issues.

RETROFITS

1)  ”Fiber Internet say’s Modern!”: Many renovations involve simple cosmetic upgrades; others are more intensive. In either case, the intention is to modernize the property and bring it up to par with the newer apartments in your area. By modernizing the property one can achieve this. Consider that retrofitting a property with a modernized Internet infrastructure does all this and more. In fact, it does three things; generates monthly revenue, increases property value, and drives marketability (i.e. higher occupancy).

2)      Launch Multiple Amenities Simultaneously: If you happen to be in a retrofit phase there is also a rent multiplier effect when adding whatever new property features you have planned with the Internet amenity. For example, adding stackable washer and dryers with the Inclusive Internet amenity can justify higher rents together, then on their own. By launching several new amenities into the newly retrofitted units rent raises have a much higher perceived value. The theory is that when analyzing multiple value-points simultaneously it becomes easier for the person to justify the bundled costs rather than analyzing them on a one-to-one basis.

3)      Don’t Just Raise Rent, Give Them Value Too: You could also justify planned market-based rent raises, by adding something of value like an Internet amenity. Residents hate market-based rent raises because they often feel they are unjustified. Marketing an Inclusive Fiber-Backed WiFi for all new leases can at least provide a sense of value as residents disconnect from their more expensive Internet connections. In practice, a rent raise is more tolerable (some may even be delighted) after the residents disconnect their expensive (national average is $67 a month) “Big Box” Internet service. Many residents will see the rent raise as a wash because they had to pay for the Internet one way or another (might as well be paying you).  Add a second amenity as mentioned above and raising rent is even easier.

CONCLUSION

Driving a technology eccentric brand through an Internet amenity is the easiest way to resonate with your technology savvy residents. This amenity will also propel your brand image not only with your residents but with your contemporaries; and in turn will increase your bottom line.

Installation and construction costs have been a financial obstacle for many owners and developers considering such an endeavor. However, if carefully designed and implemented can easily become justifiably affordable; when you consider the amazing ROI’s that are possible; developers are learning that the “Internet Ownership Model” is, in fact, a smarter play than letting a third-party Internet company generate all/most the Internet revenue from their residents.

The Internet has become the foundation for just about all technology and communication in our modern day and with ownership of Fiber-Backed Internet network, all-things-tech is now possible.  Not only can you deliver phone and TV services over the Internet but you can take advantage of the Internet of things (IoT). Moreover, savvy developers and property owners can actually turn lemons (construction costs) into lemonade (ownership, profits and control of network) by using an Internet amenity to their advantage. In fact, whether with a new-build, renovation or retrofit we see the cost of the projects is increasing the property values by over 3 times.